Tenaris Drops as Argentine Prosecutors Seek to Detain Billionaire Chairman

(Bloomberg) -- Argentine prosecutors have called for the detention of billionaire and Tenaris chairman and Chief Executive Officer Paolo Rocca as part of a graft case. Shares of the company dropped.

Two prosecutors have requested the preventive detention of Rocca, 66, the company confirmed after reports by Argentine TV station Todo Noticias. The call comes a week after Judge Claudio Bonadio, who is overseeing an investigation into a graft scandal involving the former administration, indicted Rocca, set a $103 million bond and forbade him from leaving the country. The prosecutors are appealing the judge’s decision not to demand that the billionaire go through a preliminary arrest, TN added.

“The prosecutors’ request does not constitute an order and does not have any immediate effect,” the company said in an emailed statement Wednesday. “Any such order can only be issued by a court, and the court of appeals is expected to consider the prosecutors’ request at the time it considers Judge Bonadio’s decision and Mr. Rocca’s appeal.”

Rocca has not been detained and is currently traveling on business, the company added. Rocca, who was seen at the Buenos Aires international airport Ezeiza Tuesday evening, is currently in Mexico, the company’s spokeswoman said. Tenaris shares closed 1.9 percent lower in Milan Wednesday after paring deeper declines. The stock fell 3.2 percent in Buenos Aires, while shares of Ternium, which is also majority-owned by Rocca, fell 3.7 percent.

The judge indicted Rocca on Nov. 27 after the Argentine billionaire testified that one of his company’s executives paid an undisclosed amount of cash to government officials in eight monthly installments in 2008. The officials were allegedly working for then-President Cristina Fernandez de Kirchner’s administration to speed up a compensation payment from Venezuela’s Hugo Chavez for the nationalization of Sidor, a unit that had been seized by Venezuela. Rocca’s group was compensated with $1.95 billion for the unit in 2012.

A court clerk at Bonadio’s office declined to provide comments by phone.

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